Renewable energies and energy efficiency in Central America
Title: Renewable energies and energy efficiency in Central America
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama
Lead executing agency: Secretaría General del Sistema de la Integración Centroamericana (SG-SICA)
Overall term: 2010 to 2017
In the last few years, the countries of Central America have proclaimed their own plans for an energy turnaround. They want to reduce their energy dependency on mineral oil. This currently still covers a good third of the region's power consumption, while it continues to harm the environment and cause a constantly increasing drain on the countries’ foreign currency reserves. Furthermore, current electricity generation from hydro-power (about 41% of the installed capacity) is already threatened by climate change.
Renewable energies now present a cost-effective alternative. The region possesses excellent potential for using solar, biomass, wind and geothermal energy. In addition to this, industries, businesses and public institutions, in particular, could save a great deal of energy (energy efficiency). Despite this, initiatives to promote renewable energies and energy efficiency have so far made little progress. Above all, this is due to the continued lack of a conducive investment climate for such projects. A coherent legal and regulatory framework is lacking, as are tax incentives, access to adequate financial and business services, and access to qualified personnel for planning, implementing, running and maintaining the necessary technologies.
The investment climate and the institutional and HR prerequisites for the promotion of renewable energies and energy efficiency, and for climate protection measures in Central America have improved.
The programme is active in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. It strengthens regional organisations and platforms, in particular the Central American integration system, SICA, and it promotes regional exchanges in order to improve conditions for renewable energies and energy efficiency measures. In cooperation with the private sector, it is helping to increase the number of such projects in the region. At the same time it is developing further education courses and dialogue processes for decision-makers and managers from ministries and public administration. It is also supporting collaboration between the leading training institutions in the fields of renewable energies and energy efficiency, while developing and promoting expert training courses for technicians, engineers and project managers.
The programme carries out demand-oriented and replicable measures throughout the region, at three levels:
- Policy and administration: support for national governments and the public administration in improving conditions for renewable energies and energy efficiency measures
- Service markets: improving the institutional and HR preconditions for the development and implementation of projects in the fields of renewable energy and energy efficiency
- Demonstration projects: promoting private- and public-sector initiatives and investments in the fields of renewable energy and energy efficiency.
The lead executing agency for the programme is the General Secretariat of SICA, with its energy policy coordination unit (UCE-SICA). Important implementing partners include regional organisations and platforms, national energy ministries and authorities, and energy providers, as well as chambers of industry, associations, companies and selected training institutions. The programme also works together with projects carried out by KfW development bank at regional and national levels, and with other development banks and organisations. It also provides support for innovative projects in key areas by entering into development partnerships with the private sector.
Results achieved so far
In numerous development partnerships with the private sector, the programme has demonstrated the technical and financial feasibility of renewable energy and energy efficiency measures. These successes are today being systematically incorporated into technical education courses. The programme has left its mark on numerous national laws and regulations, which are also being taken up by other countries in the region. Overall, the work of the renewable energies and energy efficiency programme is characterised by regional dialogue and cooperation.